Energy Wholesale Market Review, 28 August 2020

Headlines

Most power and gas contracts rose significantly this week, continuing rises seen in recent weeks. Day-ahead gas rose 32.5% to 26.50p/th as a result of increased gas for power demand and an outage to the Forties pipeline. Day-ahead power rose 15.2% to £47.25/MWh on decreasing wind generation throughout the latter stages of the week. September 20 gas was up 26.9% at 26.95p/th, and October 20 gas increased 19.6% to 29.15p/th. All seasonal gas contracts boosted this week, up by 7.7% on average, while both winter 20 and summer 21 gas increased 9.4% and 11.0% respectively, lifting to 38.65p/th and 34.20p/th. All seasonal power contracts followed the gas markets higher, up on average by 6.8%, as winter 20 and summer 21 expanded 8.3% and 8.6% respectively, rising to £51.00/MWh and £44.55/MWh. Brent crude oil prices remained relatively unchanged last week averaging $45.37/bl, with prices now settled following recent spikes. Market oversupply issues have been overshadowed this week amongst growing concern surrounding Hurricane Laura, which has this week been upgraded to a Category 4.

Baseload electricity
  • Day-ahead power rose 15.2% to £47.25/MWh on decreasing wind generation throughout the latter stages of the week.
  • September 20 power climbed 16.9% at £42.95/MWh and October 20 power increased 11.4% to £43.5/MWh.
  • Q420 power moved 8.5% higher to £49.00/MWh.
  • The annual October 20 contract rose 8.4% to £47.78/MWh, 5.7% lower than the same time last year (£50.69/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 28 August 2020

Annual October Contract

Baseload electricity Annual October contract 28 August 2020

Peak electricity
  • Day-ahead peak power was up 2.2% to £47.00/MWh.
  • September 20 peak power gained 8.4% at £46.09/MWh, and October 20 peak power increased 3.8% to £48.65/MWh.
  • The annual October 20 peak power lost 4.6% to £52.89/MWh.
  • This is 7.8% lower than the same time last year (57.34/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 28 August 2020

Annual October contract

Peak electricity Annual October contract 28 August 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 28 August 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 28 August 2020

  • All seasonal power contracts boosted this week, up on average by 6.8%.
  • Winter 20 and summer 21 expanded 8.3% and 8.6% respectively, rising to £51.00/MWh and £44.55/MWh.
  • All seasonal peak power contracts rose this week, up 4.0% on average.
  • Winter 20 and summer 21 peak power increased 4.6% and 4.6% respectively, rising to £58.02/MWh and £47.75/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 28 August 2020

Carbon

Commodity price movements Carbon 28 August 2020

  • Brent crude oil prices remained relatively unchanged last week averaging $45.37/bl, with prices now settled following recent spikes in a near five-month high.
  • Market oversupply issues have been overshadowed this week amongst growing concern surrounding Hurricane Laura, which has this week been upgraded to a Category 4.
  • Some oil facilities in the Gulf of Mexico have evacuated pre-empting the early landfall experienced in South-West Louisiana.
  • API 2 coal prices dropped 2.2% last week to average $53.98/t.
  • The UN Secretary general announced India must steer away from coal despite its requirement for cheap energy.
  • Despite previous weeks of a slipping EU ETS price, prices rose 6.9% to average €27.75/t this week.
  • The market experienced mixed feedback amid uncertainty surrounding the EUA-December 20 auction.
Wholesale price snapshot 

Wholesale price snapshot 28 August 2020

 

 

Posted by TEAM on 31 August 2020
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